Bulgaria invites investment in Belene project

12 March 2019

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Bulgaria's National Electricity Company (NEK) yesterday announced a call for selection of a strategic investor for the construction of Belene nuclear power plant on the Danube River near the Romanian border. The call also allows for expressions of interest to acquire a minority shareholding in the future project, as well as and/or to purchase electricity from the future power plant.

The announcement, published on the website of the Bulgarian Ministry of Energy, follows orders by the National Assembly of 7 June 2018 and of the Council of Ministers of 29 June 2018.

According to a statement accompanying the invitation, the purpose of the call is "to provide certain information to the applicants wishing to participate in the procedure".

The Bulgarian side will participate in the project company operating Belene nuclear power plant with an in-kind contribution of the assets, including the licensed site, the available equipment, the issued decisions, permits, licences and other documents related to the project. A number of conditions are laid down in the procedure with the aim of "maximising the protection of the property interest" of the Bulgarian side.

The Bulgarian state, through NEK, reserves the right of a blocking quota when deciding on certain issues within the competence of the shareholders’ general assembly in the project company, according to the statement. The construction of the plant is envisaged to be carried out according to market principles and without the conclusion of long-term power purchase agreements with the state or provision of any sovereign guarantees, it added.

The deadline for receipt of applications is the 90th day as of the date on which the call is published - 11 March - in the Official Journal of the European Union. The indicative deadline for completion of the procedure will be 12 months from the date of publication of this invitation in the Official Journal.

NEK is a single-owner joint-stock company, 100% owned by Bulgarian Energy Holding. Its main activity is electricity generation and trading.

The text describing the invitation states that the call "does not purport to contain all the information that a potential subscriber of shares in the Project Company may need, and the information in the Call is provided for guidance only".

The history of the project dates back to 2005, when the Bulgarian government approved construction of the plant. The following year, NEK awarded Atomstroyexport (ASE), a subsidiary of Russia’s Rosatom, the contract to build two 1000 MWe reactors at Belene. The Bulgarian government scrapped the project in 2012 amid difficulties in attracting investors to the project.

In June 2016, the International Court of Arbitration awarded ASE EUR620 million (USD700 million) in compensation for equipment already manufactured for the plant, which will be delivered to Bulgaria following payment.

The project was cancelled by parliament, but later talks took place with Rosatom about the possibility of installing one of the reactors at Bulgaria’s Kozloduy nuclear power plant and selling the second one to a third party. An alternative is the privately financed completion of Belene.

On 7 June 2018, the Bulgarian parliament voted to abolish the moratorium on the construction of the Belene power plant and the aim of the government now is to complete the project through funding by a strategic investor.